Whether you can discharge a fine in bankruptcy will depend on why you were assessed the fine to begin with. The general rule with respect to fines and court costs in criminal cases is that fines issued as punishment for the crime are not dischargeable in either a Chapter 7 or Chapter 13. This includes fines in a criminal sentencing order or restitution set out in a criminal sentencing order. Fines from a traffic ticket are also not discharged.
The Criminal Fines and Restitution Exception
Neither Chapter 7 nor Chapter 13 will allow a Debtor to write off criminal fines, penalties, forfeiture, or restitution. Section 523(a)(7) of the U.S. Bankruptcy Code provides that, under Chapter 7, any “fine, penalty, or forfeiture” owed to “a governmental unit” is excluded from discharge. .
Criminal restitution is also not written off in Chapter 7. Excluded are debts “for any payment of an order of restitution issued under title 18, United States Code.” Title 18 is the federal government’s criminal code. Bankruptcy courts have extended this to include state criminal restitution as well.
Are Any Government Fines Ever Dischargeable?
Fines that are related to court ordered reimbursement of governmental expenses are dischargeable in bankruptcy. Examples would be a fine to reimburse your city for not removing your trash when you were cited before. The fine is considered an attempt by the municipality to recoup an expense and is civil, not criminal, in nature. It can therefore be discharged.
Another common example of a government imposed debt is debt related to overpayment of public assistance benefits. These claims are civil in nature ( a claim for reimbursement of money paid), and therefore the claim can be discharged.
It is always a good idea to contact an attorney who is knowledgeable about the ins and outs of Chapter 7 and Chapter 13 bankruptcy when you cannot pay government debts, including criminal reimbursement fines or court related fines and costs.
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